Provectus Algae has raised a $10.1 million Series A round and secured a $2.5 million grant from the Australian government to scale an indoor growing system it claims can transform the unit economics of growing Asparagopsis (red seaweed) for livestock methane reduction.
The round was led by At One Ventures and included Methane Mitigation Ventures, leading Australian beef cattle lot co Mort & Co, and existing shareholders including Hitachi Ventures. It will enable the firm—which has raised $33.5 million to date—to further scale production, perform large trials, and supply large quantities of its ‘Surf ‘n’ Turf feed additive to the market.
“The Mort & Co team has been actively involved in testing various feed additives as part of its ongoing commitment to improving sustainability and animal welfare. With the ability to scale production and tailor products for our animals and operations, we have partnered with Provectus Algae to conduct trials of their product designed to reduce methane emissions and increase cattle performance,” said Charlie Mort, executive chairman of Mort & Co.
“Achieving increased performance alongside the reduction in methane will provide great opportunity for the industry and we are eager to be a part of this journey.”
Enteric methane production
A potent greenhouse gas, methane is produced in ruminants such as cows and sheep in a stomach compartment called the rumen. Here, microbes break down complex carbs to produce carbon dioxide and hydrogen, which are in turn converted into methane by another set of microbes (methanogens) and belched out.
Approaches to tackling enteric methane production vary, with innovative startups and academics exploring everything from vaccines to breeding animals that produce less methane, to editing the genes of the microbes in the rumen.
While some of these approaches may take years to hit the market, several feed supplements that interfere with the production of methane in ruminants are already commercially available, although questions remain over who will ultimately foot the bill: farmers, processors, or consumers?
A scalable, modular, biomanufacturing platform
Founded in 2017 by marine biotechnologist Nusqe Spanton, Queensland-based Provectus Algae has developed closed-system automated bioreactors growing photosynthetic algae at high densities with a series of LED lights.
“It’s a scalable, modular, biomanufacturing platform,” Spanton told AgFunderNews. “We can roll this system out anywhere in the world and bring production on very, very fast.”
Through its cloud-enabled, automated “self-optimizing” system, Provectus can deliver any type of light in the visible spectrum but also in the infrared and UV spectrum, manipulating the algae and pushing it down a metabolic pathway to increase the production of target substances.
Provectus Algae’s closed system, claims Spanton, can produce Asparagopsis more rapidly than other land-based growing systems while consistently controlling the expression of the bioactives that can tackle methane such as bromoform, “leading to a step-change in the cost of goods.”
He added: “The key is our precision photosynthesis technology that controls gene expression through light. That really allows us to have control over the organism and give it what it requires to grow. This allows us to get vastly higher growth rates than what’s ever been seen before in both open ocean systems and in closed pond systems.”
As Provectus operates a modular system, it is also better positioned to tackle potential contamination issues, which can plague algae production platforms, claimed Spanton. “We can isolate each reactor. It’s a fully recirculating, closed system. We have full control over every bioreactor. At the moment, they’re semi continuous and semi-automated. In the future, they’ll be fully autonomous.”
Asparagopsis’ slow growth in conventional aquaculture and ocean farming systems and fluctuations in bioactive compound concentrations are major hurdles to reaching scale and price parity with synthetic alternatives, claimed Spanton.
“We can guarantee the same quality of product coming out every day, which is really difficult to do if you’re growing seaweed in an open ocean or open pond environment. My team has been working in aquaculture for 20 years, growing algae at industrial scale, and we know the challenges, which is why we built this system.”
For downstream processing, Provectus Algae has developed tech enabling to stabilize the active compounds in the seaweed and deliver them in a dry, finished powder (‘Surf ‘n’ Turf) that can go into any feed formulation and remain stable at ambient temperature, he said.
“This can be mixed into lick blocks to go on to pastoral applications. It can go into liquid supplements or dry rationing feed lots, and it can also go into the feed rations of dairy animals. It’s very simple to use.”
Who will foot the bill for livestock methane reduction?
When it comes to the ROI for livestock methane reduction, said Spanton, there has to be a tangible benefit for the farmer in the form of productivity gains, although high-quality carbon credits could also form a key part of the equation in future. “But if you’re relying on a green premium, I think your business model is fundamentally flawed,” he said.
“The reality of the way the supply chain works in the beef industry, if you want to capture a green premium, you have to deal with direct-to-consumer brands, and that is a niche market. To capture the commodity market, you have to deliver a return on farm.”
Asked what kind of productivity gains can be achieved via Asparagopsis through improved feed conversion rates, he said, “There’s a lot of work to be done, but initial signs are very promising and we’re working closely with our partners to generate a return for farmers.”
Carbon credits
When it comes to carbon credits, said Spanton, “I think the potential is enormous given that the ability to be able to measure the abatement in real time should enable the creation of extremely high value credits into a market that is very opaque at the moment. A lot of the carbon credits out there are dubious at best.
“The challenge right now is how to convert that value proposition into something that’s actually generating revenue at scale, so there’s a lot of work to do. You have to validate. You have to be able to track and measure what the abatement is on-farm. When we do see this move through the system, and we are working actively on this, it needs to be bulletproof. You need to have a monitoring and verification process that gives the carbon market confidence in what’s being delivered.”
Manufacturing and scale up
Provectus Algae is currently at around 110,000-liter capacity and should be at about 260,000 liters by September, said Spanton.
“We’re going to be moving pretty rapidly to increase that. Our target is to get to somewhere in the vicinity of 30-50,000 animals a day on our product by early next year, and then as we move to the end of next year into 2027, we’d love to be able to be delivering significant industrial volumes into the Australian market and be on our way to scaling up in multiple additional markets globally as well.
“We can roll this out anywhere in the world, which is key, given that the vast majority of animals are not situated on the coast, and we need to be able to deliver huge volumes of this product locally where large farming operations are.”
Provectus Algae has secured a license from Future Feed, which has the global IP rights to Asparagopsis seaweed technology developed by Australian government agency CSIRO, Meat and Livestock Australia, and James Cook University.
The funding environment
Securing money in the current environment “comes down to the ability of companies to be able to prove efficacy in the product and scalability in their technology,” claimed Spanton. “This needs to be delivered at really mind-blowing scale. But if you can do that, I think there’s huge opportunity.
“In the Australian market, the feedlot beef market alone is dealing with about 1.2-1.5 million animals a year, so we’re talking about enormous scale. And the fact that our supply chains are ready to scale up now is a huge driver for this investment round.”
He added: “There’s going to need to be a whole suite of technology solutions potentially. But we believe Asparagopsis is the right one, a natural product with the ability to drive the most significant methane reduction and potential performance gains in animals.”
Further reading:
Symbrosia submits data to FDA, plans 15-acre seaweed production site for methane-reducing feed
CH4 Global teams up with Mitsubishi on livestock methane reduction
Sea Forest strikes deal to bring livestock methane-busting seaweed supplements to East Africa
ArkeaBio: Vaccination is ‘the lowest cost and easiest to scale’ livestock methane reduction solution
